Evidence of meeting #4 for Bill C-11 (41st Parliament, 1st Session) in the 41st Parliament, 1st Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was radio.
A recording is available from Parliament.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
The 30-day requirement is not in the bill. The 30-day requirement is actually in the act; it was in the act before. The bill doesn't change the 30-day requirement.
Conservative
Mike Lake Conservative Edmonton—Mill Woods—Beaumont, AB
He referenced a couple of times that it was in the bill. I just wanted to clarify that it's not actually in the bill.
NDP
Andrew Cash NDP Davenport, ON
Thank you.
What I'm trying to get at here is that substantively nothing.... Your requirement as a broadcaster is to retain a licence from the rights-holders.
President, Pineridge Broadcasting
When I download it the first time I pay that licence. What is now required, in the last several years...I now have to pay multiple times because supposedly I'm making reproductions, and I'm not.
NDP
Andrew Cash NDP Davenport, ON
Actually, the way C-11 reads, in fact you now have a 30-day exemption. So in fact once you pay the licence, you actually have 30 days for free, right?
President, Pineridge Broadcasting
No, I've paid mine for 30 days. Basically I've paid for 30 days.
NDP
Andrew Cash NDP Davenport, ON
No. Actually the way this reads is that when you get the copy from the record companies, you have 30 days essentially to have that music.
Andrew Cash NDP Davenport, ON
Then at that point you have a decision to make. You either pay for the licence or you copy it.
What I'm trying to clarify here is which one you will do. Will you copy your library every 30 days or will you go to the collective society? As you know, just about all of the music that you play is licensed by collective societies. They have those licences. Which will you do? Will you make the copy, therefore avoiding the collective licence, or will you go to the collective society and pay the licence?
President, Pineridge Broadcasting
Sir, I'm just asking to be fair. I pay for a licence to download a piece of music for which I never before had to pay. Then, after each 30 days, basically, from what you just said, I'm being charged to reproduce it—when I don't reproduce it; I play it back on the same computer on which I download it.
NDP
Conservative
Dean Del Mastro Conservative Peterborough, ON
Thank you, Mr. Chairman, and thank you to our witnesses today.
I had a number of different questions that I wanted to ask, but I'm going to pick up on this, because it's really important.
There have been a number of things said today that by the way are not entirely accurate about what radio contributes to the music system, so I want to make this clear. To begin with, radio stations right now buy music, but the record companies don't sell it in the format in which they use it. So then they have to buy the music a second time. This is called “ephemeral rights”. Ephemeral rights didn't exist until about 2006, when they started charging for it. Since that time, they've gone up in price—you can correct me if I'm wrong, Mr. Conway—about 300% since they were originally brought in.
Conservative
Dean Del Mastro Conservative Peterborough, ON
They've roughly doubled, or they may have gone up a little more than that; I'll check to be sure.
This is the crux of the issue. When it's suggested that we subsidize our radio stations because we have this $1.25 million threshold, what you are not pointing out, Mr. MacKay, is that our radio stations are contributing significantly to the Canada Music Fund and through FACTOR. Many companies don't have this kind of tax that is placed on the radio stations.
We also have something called Canadian content laws in this country, which over-the-top services like satellite radio, YouTube, and all of these services don't have to compete with. That's something that local radio has to compete with each and every day. When you suggest that they have this massive subsidy that's supporting their business, you are not being wholly transparent; you are neglecting to point out all of these other fees, which are significant. They are millions of dollars, I believe. The fees provided into the Canada Music Fund by radio stations are about $30 million per year. It's a lot of money. You are neglecting to point that out. You're only looking at half of the story, and this is important.
Mr. Conway, the crux of what is being discussed is that you have a value placed by the Copyright Board on music. You don't argue with that value; your issue is that you are not able to buy that music in the first place in the format that you use, and then you are forced to pay again.
Is that not the crux of the issue? Is that not what you are talking about?
President, Pineridge Broadcasting
I am paying to make multiple copies when I don't make multiple copies.
Conservative
Dean Del Mastro Conservative Peterborough, ON
Right. This is what's called ephemeral rights.
The bill does deal with ephemeral rights in that it seeks to strike them down; however, the bill suggests that in 30 days you must erase the music or you must pay ephemeral rights. Is that correct?
What you are suggesting is that it doesn't make any sense to say that you have to pay for the music and then transfer it into the format you use, but that if you don't delete it in 30 days, you have to pay again for the music.
Is that your point?
Conservative
Dean Del Mastro Conservative Peterborough, ON
Thank you. That's exactly what I needed to get at.
Now, you talked about increasing the $1.25 million threshold to $2 million. What impact would that have on radio stations? How much money would it remove from the system? How much more are you paying in copyright fees with $2 million in sales than you would pay if you had $1.25 million in sales?
President, Pineridge Broadcasting
That's a very hard question, because I don't have my figures at hand.
It's rather interesting. When I was writing my presentation on Sunday, I didn't know that this was even going to be discussed by Re:Sound. When I got the copyright information, back two years ago when it came out, and saw that it showed a medium station as being $1.25 million, I just laughed. We're not a medium radio station and we make more than that in revenues.
That has been my big concern. I thought that here was an opportunity to tell some folks what that really means: that while the folks we pay the tariffs to tell you folks that a medium-sized radio station should be $1.25 million, we're a small station and we have to make more than that and we're still right there on the profit-loss line.
That's why I said $2 million would be much better than $1.25 million. Now, to come here and hear them say they want to wipe it out.... Man, you want to kill me.
Conservative
Dean Del Mastro Conservative Peterborough, ON
All right. I understand.
I actually have a point that I want to make to Re:Sound. I'll just start out by saying I think you perform a necessary function, and I don't take issue with that. However, you'd probably have to admit that for local businesses and so forth, you're about as popular as a tax collector or cod liver oil to children. They don't like it when Re:Sound comes in and—
Conservative
Dean Del Mastro Conservative Peterborough, ON
—hands out a bill.
I am interested in this issue of orphan files. How many artists are we talking about, and how much money are we talking about redistributing if we get this fixed?
